The latest news today on the BofA-Merrill merger investigations is that the New York AG has issued subpoenas to 5 current or former directors of Bank of America, seeking to learn what they knew about Merrill's financial condition and the bonus payments before the deal was closed. NYTimes, Cuomo Is Said to Issue Subpoenas in Merrill Case; WSJ, Cuomo Calls In 5 BofA Directors. Mr. Cuomo is quoted as saying he wants to know whether the directors protected the shareholders' interests, whether they were misled, or were they rubber stamps?

For those of us teaching Corporations this fall, this is great stuff. Today in class, several students expressed skepticism about the priority given to independence, as opposed to expertise, as a value for directors. According to the New York Times article, the subpoenaed directors included a real estate executive, a venture capital investor, a retired 4-star general, a former college president, and the head of a utility company. Not a lot of banking, financial services, or audit expertise there. According again to the article, at least some of the directors were members of the audit committee.

The articles also state that it is "rare" to subpoena board members in a criminal case. This sounds a little surprising to me, given the Dept. of Justice's investigations in the aftermath of the Enron/Worldcom debacles. Can readers think of other examples?